Medicare Compliance & Reimbursement

PHARMACEUTICALS:

GAO Outlines Skyrocketing Drug Price Pattern

Feds analyze pair of pharmacy assistance programs for report.

As the federal government takes on more of the country's drug cost burdens under Medicare Part D and pharmaceutical companies continue to raise their prices, providers could find themselves caught within a cost-cutting tug-of-war. Report Reveals U&C Price Tags In a study released on Sept. 15, the Government Accountability Office says that drug prices skyrocketed from January 2000 to December 2004. The GAO obtained the usual and customary prices from two state pharmacy assistance programs and reviewed the pricing trends of 96 drugs that Medicare and non-Medicare Blue Cross and Blue Shield Federal Employee Program (BCBS-FEP) enrollees frequently use.

Average U&C prices for these drugs increased 24.5 percent during the four-year time period. The GAO compared the increases of the U&C price--the price that an individual without prescription drug coverage would pay at a retail pharmacy--to increases in the average manufacturer price (AMP) and the average wholesale price (AWP).

Average U&C price increases for 75 of the 96 prescription drugs that Medicare beneficiaries frequently use were similar to increases for 76 drugs that non-Medicare enrollees used. Brand Names Get Big Price Bump The GAO report found that pharmaceuticals with brand names got a lot more expensive. There were 50 brand prescription drugs whose average U&C prices increased three times as much as the average U&C for 46 generic drugs, according to the GAO.

"AWPs increased at a faster rate than AMPs and U&C prices for the 50 frequently used brand drugs from first quarter 2000 through fourth quarter 2004," the GAO notes.

To read the report, go to http://www.gao.gov/new.items/d05779.pdf.
You’ve reached your limit of free articles. Already a subscriber? Log in.
Not a subscriber? Subscribe today to continue reading this article. Plus, you’ll get:
  • Simple explanations of current healthcare regulations and payer programs
  • Real-world reporting scenarios solved by our expert coders
  • Industry news, such as MAC and RAC activities, the OIG Work Plan, and CERT reports
  • Instant access to every article ever published in Revenue Cycle Insider
  • 6 annual AAPC-approved CEUs
  • The latest updates for CPT®, ICD-10-CM, HCPCS Level II, NCCI edits, modifiers, compliance, technology, practice management, and more

Other Articles in this issue of

Medicare Compliance & Reimbursement

View All